According to the above figure, when the monopolist maximizes profits, its profits are equal to the area given by
A. BLPE.
B. EPRF.
C. AKMC.
D. AKOD.
Answer: D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Refer to Figure 8-10. Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2. The price that sellers receive is
A. P0. B. P2. C. P5. D. P8.
Comparing a perfectly competitive market to a single-price monopoly with the same costs, we see that
A) both markets are equally efficient in their use of resources. B) the monopoly market always is more efficient in the use of resources. C) the perfectly competitive market achieves efficiency in resource use while the monopoly market does not. D) the monopoly market achieves efficiency in resource use while perfectly competitive market does not. E) None of the above answers is correct because comparing a perfectly competitive market to a monopoly is impossible.
By external balance, most economists mean
A) avoiding excessive imbalances in international payments. B) balance between exports and imports. C) balance between the trade and service accounts. D) what amounts to fixed exchange rates. E) imbalance in internal transactions.